Svalbard Economy Profile

Coal mining, tourism, and international research are Svalbard's major industries. Coal mining has historically been the dominant economic activity, and the Spitzbergen Treaty of 9 February 1920 gives the 45 countries that so far have ratified the treaty equal rights to exploit mineral deposits, subject to Norwegian regulation. Although US, UK, Dutch, and Swedish coal companies have mined in the past, the only companies still engaging in this are Norwegian and Russian. Low coal prices have forced the Norwegian coal company, Store Norske Spitsbergen Kulkompani, to close one of its two mines and to considerably reduce the activity of the other. Since the 1990s, the tourism and hospitality industry has grown rapidly, and Svalbard now receives 60,000 visitors annually.

The settlements on Svalbard were established as company towns, and at their height in the 1950s, the Norwegian state-owned coal company supported nearly 1,000 jobs. Today, only about 300 people work in the mining industry.

Goods such as alcohol, tobacco, and vehicles, normally highly taxed on mainland Norway, are considerably cheaper in Svalbard in an effort by the Norwegian Government to entice more people to live on the Arctic archipelago. By law, Norway collects only enough taxes to pay for the needs of the local government; none of tax proceeds go to the central government.

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